EXHIBIT 10.13
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO
SALE OR DISPOSITION MAY BE EFFECTED EXCEPT IN COMPLIANCE WITH RULE 144 UNDER
SAID ACT OR WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN
OPINION OF COUNSEL FOR THE HOLDER, SATISFACTORY TO THE COMPANY, THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE ACT OR RECEIPT OF A NO-ACTION LETTER
FROM THE SECURITIES AND EXCHANGE COMMISSION.
WARRANT TO PURCHASE SHARES OF SERIES B PREFERRED STOCK
January 8 1999
THIS. CERTIFIES THAT, for value received, Lease Management Services,
Inc. ("Holder") is entitled to subscribe for and purchase shares of the fully
paid and nonassessable Series B Preferred Stock (the "Shares" or the
"Preferred Stock") of Deltagen, Inc., a Delaware corporation (the "Company"),
at the Warrant Price (as hereinafter defined), subject to the provisions and
upon the terms and conditions hereinafter set forth. As used herein, the term
"Series B Preferred Stock" shall mean the Company's presently authorized
Series B Preferred Stock and any stock into which such Series B Preferred
Stock may hereafter be converted or exchanged.
1. WARRANT PRICE. The Warrant Price shall initially be One and
75/100 dollars ($1.75) per share, subject to adjustment as provided in
Section 7 below. The number of shares for which this Warrant shall be
exercisable shall be equal to the greater of (i) ten thousand two hundred
eighty-five (10,28 5) or (ii) the number of shares obtained by multiplying
the amount of the credit facility utilized by the Company during the funding
period by two percent (2%) and then dividing by One and 75/100 dollars
($1.75). [For example, if $1,200,000 of the line is utilized, the Warrant will
be for 13,714 shares (i.e. $1,200,000 x 2.0% / $1.75).]
2. CONDITIONS TO EXERCISE. The purchase right represented by this
Warrant may be exercised at any time, or from time to time, in whole or in
part during the term commencing on the date hereof and ending on the earlier
of-
(a) 5:00 P.M. Pacific time on the seventh annual anniversary of this
Warrant; or
(b) the effective date of the merger of the Company with or into, the
consolidation of the Company with, or the sale by the Company of all or
substantially all of its assets or all or substantially all of its shares to
another corporation or other entity (other than such a transaction wherein
the shareholders of the Company retain or obtain a majority of the voting
capital stock of the surviving, resulting, or purchasing corporation);
provided that the Company shall notify the registered Holder of this Warrant
of the proposed effective date of the merger, consolidation, or sale at least
30 days prior to such proposed date.
In the event that, although the Company shall have given notice of a
transaction pursuant to subparagraph (b) hereof, any exercise of the Warrant
subsequent to the giving of such notice shall be conditioned upon the
effectiveness of the merger or other transaction so noticed.
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3. METHOD OF EXERCISE; PAYMENT; ISSUANCE OF SHARES; ISSUANCE OF NEW
WARRANT.
(a) CASH EXERCISE. Subject to Section 2 hereof, the purchase right
represented by this Warrant may be exercised by the Holder hereof, in whole
or in part, by the surrender of this Warrant (with a duly executed Notice of
Exercise in the form attached hereto) at the principal office of the Company
(as set forth in Section 18 below) and by payment to the Company, by
certified bank check, of an amount equal to the then applicable Warrant Price
per share multiplied by the number of shares then being purchased. In the
event of any exercise of the rights represented by this Warrant, certificates
for the shares of-stock so purchased shall be in the name of, and delivered
to, the Holder hereof, or as such Holder may direct (subject to the terms of
transfer contained herein and upon payment by such Holder hereof of any
applicable transfer taxes). Such delivery shall be made within 30 days after
exercise of the Warrant and at the Company's expense and, unless this Warrant
has been fully exercised or expired, a new Warrant having terms and
conditions substantially identical to this Warrant and representing the
portion of the Shares, if any, with respect to which this Warrant shall not
have been exercised, shall also be issued to the Holder hereof within 30 days
after exercise of the Warrant.
(b) NET ISSUE EXERCISE. In lieu of exercising this Warrant pursuant
to Section 3(a), Holder may elect to receive shares equal to the value of
this Warrant (or of any portion thereof remaining unexercised) by surrender
of this Warrant at the principal office of the Company together with notice
of such election, in which event the Company shall issue to Holder the number
of shares of the Company's Preferred Stock computed using the following
formula:
X = Y (A-B)
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A
Where X = the number of shares of Preferred Stock to be issued to Holder.
Y = the number of shares of Preferred Stock purchasable under this
Warrant (at the date of such calculation).
A = the Fair Market Value of one share of the Company's Preferred Stock
(at the date of such calculation).
B = Warrant Price (as adjusted to the date of such calculation).
(c) FAIR MARKET VALUE. For purposes of this Section 3, Fair Market
Value of one share of the Company's Preferred Stock shall mean:
(i) In the event of an exercise in connection with an Initial
Public Offering, the per share Fair Market Value for the Preferred Stock
shall be the Offering Price at which the underwriters initially sell
Common Stock to the public multiplied by the number of shares of Common
Stock into which each share of Preferred Stock is then convertible; or
(ii) The average of the closing bid and asked prices of Common
Stock quoted in the Over-The-Counter Market Summary, the last reported
sale price quoted on the NASDAQ National Market ("NNM") or on any exchange
on which the stock is listed,
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whichever is applicable, as published in the Western Edition of the WALL
STREET JOURNAL for the ten (10) trading days prior to the date of
determination of fair market value, multiplied by the number of shares of
Common Stock into which each share of Preferred Stock is then convertible;
or
(iii) In the event of an exercise in connection with a merger,
acquisition or other consolidation in which the Company is not the
surviving entity, as described in Section 2(b), the per share Fair Market
Value for the Preferred Stock shall be the value to be received per share
of Preferred Stock by all Holders of the Preferred Stock in such
transaction as determined by the Board of Directors; or
(iv) In any other instance, the per share Fair Market Value for the
Preferred Stock shall be as determined in good faith by the Company's
Board of Directors.
In the event of 3(c)(iii) or 3(c)(iv), above, the Company's Board of
Directors shall prepare a certificate, to be signed by an authorized
Officer of the Company, setting forth in reasonable detail the basis for
and method of determination of the per share Fair Market Value of the
Preferred Stock. The Board will also certify to the Holder that this per
share Fair Market Value will be applicable to all holders of the Company's
Preferred Stock. Such certification must be made to Holder at least thirty
(30) days prior to the proposed effective date of the merger,
consolidation, sale, or other triggering event as defined in 3(c)(iii) and
3(c)(iv).
(d) AUTOMATIC EXERCISE. To the extent this Warrant is not previously
exercised, it shall be automatically exercised in accordance with Sections
3(b) and 3(c) hereof (even if not surrendered) immediately before: (i) its
expiration or (ii) the consummation of any consolidation or merger of the
Company, or any sale or transfer of all or substantially all of the Company's
assets or shares pursuant to Section 2(b).
4. REPRESENTATIONS AND WARRANTIES OF HOLDER AND RESTRICTIONS ON
TRANSFER IMPOSED BY THE SECURITIES ACT OF 1933.
(a) REPRESENTATIONS AND WARRANTIES BY HOLDER. Holder represents and
warrants to the Company with respect to this purchase as follows:
(i) The Holder has substantial experience in evaluating and
investing in private placement transactions of securities of companies
similar to the Company so that the Holder is capable of evaluating the
merits and risks of its investment in the Company and has the capacity to
protect its interests.
(ii) The Holder is acquiring the Warrant and the Shares of
Preferred Stock issuable upon exercise of the Warrant (collectively the
"Securities") for investment for its own account and not with a view to,
or for resale in connection with, any distribution thereof. The Holder
understands that the Securities have not been registered under the
Securities Act of 1933, as amended (the "Act") by reason of a specific
exemption from the registration provisions of the Act which depends upon,
among other things, the bona fide nature of the investment intent as
expressed herein. In this connection, the Holder understands that, in the
view of the Securities and Exchange Commission (the "SEC"),
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the statutory basis for such exemption may be unavailable if this
representation was predicated solely upon a present intention to hold the
Securities for the minimum capital gains period specified under tax
statutes, for a deferred sale, for or until an increase or decrease in
the market price of the Securities or for a period of one year or any
other fixed period in the future.
(iii) The Holder acknowledges that the Securities must be held
indefinitely unless subsequently registered under the Act or an exemption
from such registration is available. The Holder is aware of the provisions
of Rule 144 promulgated under the Act ("Rule 144") which permits limited
resale of securities purchased in a private placement subject to the
satisfaction of certain conditions, including, in case the securities have
been held for more than one but less than two years, the existence of a
public market for the shares, the availability of certain public
information about the Company, the resale occurring not less than one year
after a party has purchased and paid for the security to be sold, the sale
being through a "broker's transaction" or in a transaction directly with a
"market maker" (as provided by Rule 144(f)) and the number of shares or
other securities being sold during any three-month period not exceeding
specified limitations.
(iv) The Holder further understands that at the time the Holder
wishes to sell the Securities there may be no public market upon which
such a sale may be effected, and that even if such a public market exists,
the Company may not be satisfying the current public information
requirements of Rule 144, and that in such event, the Holder may be
precluded from selling the Securities under Rule 144 unless (a) a one-year
minimum holding period has been satisfied and (b) the Holder was not at
the time of the sale nor at any time during the three-month period prior
to such sale an affiliate of the Company.
(v) The Holder has had an opportunity to discuss the Company's
business, management and financial affairs with its management and an
opportunity to review the Company's facilities. The Holder understands
that such discussions, as well as the written information issued by the
Company, were intended to describe the aspects of the Company's business
and prospects which it believes to be material but were not necessarily a
thorough or exhaustive description.
(b) LEGENDS. Each certificate representing the Securities shall be
endorsed with the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 AND MAY NOT BE TRANSFERRED UNLESS COVERED BY AN EFFECTIVE
REGISTRATION STATEMENT UNDER SAID ACT, A "NO ACTION" LETTER FROM THE
SECURITIES AND EXCHANGE COMMISSION WITH RESPECT TO SUCH TRANSFER, A
TRANSFER MEETING THE REQUIREMENTS OF RULE 144 OF THE SECURITIES AND
EXCHANGE COMMISSION, OR (IF REASONABLY REQUIRED BY THE COMPANY) AN
OPINION OF COUNSEL SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY
SUCH TRANSFER IS EXEMPT FROM SUCH REGISTRATION.
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The Company need not enter into its stock records a transfer of Securities
unless the conditions specified in the foregoing legend are satisfied. The
Company may also instruct its transfer agent not to allow the transfer of any
of the Shares unless the conditions specified in the foregoing legend are
satisfied.
(c) REMOVAL OF LEGEND AND TRANSFER RESTRICTIONS. The legend relating
to the Act endorsed on a certificate pursuant to paragraph 4(b) of this
Warrant and the stop transfer instructions with respect to the Securities
represented by such certificate shall be removed and the Company shall issue
a certificate without such legend to the Holder of the Securities if (i) the
Securities are registered under the Act and a prospectus meeting the
requirements of Section 10 of the Act is available or (ii) the Holder
provides to the Company an opinion of counsel for the Holder reasonably
satisfactory to the Company, or a no-action letter or interpretive opinion of
the staff of the SEC reasonably satisfactory to the Company, to the effect
that public sale, transfer or assignment of the Securities may be made
without registration and without compliance with any restriction such as Rule
144.
5. CONDITION OF TRANSFER OR EXERCISE OF WARRANT. It shall be a
condition to any transfer or exercise of this Warrant that at the time of
such transfer or exercise, the Holder and any transferor shall provide the
Company with a representation in writing that the Holder or transferee is
acquiring this Warrant and the shares of Preferred Stock to be issued upon
exercise for investment purposes only and not with a view to any sale or
distribution, or will provide the Company with a statement of pertinent facts
covering any proposed distribution. As a further condition to any transfer of
this Warrant or any or all of the shares of Preferred Stock issuable upon
exercise of this Warrant, other than a transfer registered under the Act, the
Company must have received a legal opinion, in form and substance
satisfactory to the Company and its counsel, reciting the pertinent
circumstances surrounding the proposed transfer and stating that such
transfer is exempt from the registration and prospectus delivery requirements
of the Act. Each certificate evidencing the shares issued upon exercise of
the Warrant or upon any transfer of the shares (other than a transfer
registered under the Act or any subsequent transfer of shares so registered)
shall, at the Company's option, contain a legend in form and substance
satisfactory to the Company and its counsel, restricting the transfer of the
shares to sales or other dispositions exempt from the requirements of the Act.
As further condition to each transfer, the Holder shall surrender this
Warrant to the Company and the transferee shall receive and accept a Warrant,
of like tenor and date, executed by the Company.
6. STOCK FULLY PAID, RESERVATION OF SHARES. All Shares which may be
issued upon the exercise of the rights represented by this Warrant will, upon
issuance, be fully paid and nonassessable, and free from all taxes, liens,
and charges with respect to the issue thereof. During the period within which
the rights represented by this Warrant may be exercised, the Company will at
all times have authorized, and reserved for issuance upon exercise of the
purchase rights evidenced by this Warrant, a sufficient number of shares of
its Preferred Stock to provide for the exercise of the rights represented by
this Warrant.
7. ADJUSTMENT FOR CERTAIN EVENTS. In the event of changes in the
outstanding Common Stock by reason of stock dividends, split-ups,
recapitalizations, reclassifications,
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mergers, consolidations, combinations or exchanges of shares, separations,
reorganizations, liquidations, or the like, the number and class of shares
available under the Warrant in the aggregate and the Warrant Price shall be
correspondingly adjusted, as appropriate, by the Board of Directors of the
Company. The adjustment shall be such as will give the Holder of this Warrant
upon exercise for the same aggregate Warrant Price the total number, class
and kind of shares as it would have owned had the Warrant been exercised
prior to the event and had it continued to hold such shares until after the
event requiring adjustment.
8. NOTICE OF ADJUSTMENTS. Whenever any Warrant Price shall be
adjusted pursuant to Section 7 hereof, the Company shall prepare a
certificate signed by an officer of the Company setting forth, in reasonable
detail, the event requiring the adjustment, the amount of the adjustment, the
method by which such adjustment was calculated, and the Warrant Price and
number of shares issuable upon exercise of the Warrant after giving effect to
such adjustment, and shall cause copies of-such certificate to be mailed (by
certified or registered mail, return receipt required, postage prepaid)
within thirty (30) days of such adjustment to the Holder of this Warrant as
set forth in Section 18 hereof.
9. "MARKET STAND-OFF" AGREEMENT. Holder hereby agrees that for a
period of up to 180 days following the effective date of the first
registration statement of the Company covering common stock (or- other
securities) to be sold on behalf of the Company in an underwritten public
offering, it will not, to the extent requested by the Company and any
underwriter, sell or otherwise transfer or dispose of (other than to donees
or transferees who agree to be similarly bound) any of the Shares at any time
during such period except common stock included in such registration;
provided, however, that all officers and directors of the Company who hold
securities of the Company or options to acquire securities of the Company and
all other persons with registration rights enter into similar agreements.
10. TRANSFERABILITY OF WARRANT. This Warrant is transferable in its
entirety upon the books of the Company.
11. NO FRACTIONAL SHARES. No fractional share of Preferred Stock will
be issued in connection with any exercise hereunder, but in lieu of such
fractional share the Company shall make a cash payment therefor upon the
basis of the Warrant Price then in effect.
12. CHARGES, TAXES AND EXPENSES. Issuance of certificates for shares
of Preferred Stock upon the exercise of this Warrant shall be made without
charge to the Holder for any United States or state of the United States
documentary stamp tax or other incidental expense with respect to the
issuance of such certificate, all of which taxes and expenses shall be paid
by the Company, and such certificates shall be issued in the name of the
Holder.
13. NO SHAREHOLDER RIGHTS UNTIL EXERCISE. This Warrant does not
entitle the Holder hereof to any voting rights or other rights as a
shareholder of the Company prior to the exercise hereof.
14. REGISTRY OF WARRANT. The Company shall maintain a registry
showing the name and address of the registered Holder of this Warrant. This
Warrant may be surrendered for exchange or exercise, in accordance with its
terms, at such office or agency of the Company, and
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the Company and Holder shall be entitled to rely in all respects, prior to
written notice to the contrary, upon such registry.
15. LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANT. Upon receipt
by the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, and, in the case of loss, theft,
or destruction, of indemnity reasonably satisfactory to it, and, if
mutilated, upon surrender and cancellation of this Warrant, the Company will
execute and deliver a new Warrant, having terms and conditions substantially
identical to this Warrant, in lieu hereof.
16. MISCELLANEOUS.
(a) ISSUEDATE. The provisions of this Warrant shall be construed and
shall be given effect in all respect as if it had been issued and delivered
by the Company on the date hereof.
(b) SUCCESSORS. This Warrant shall be binding upon any successors or
assigns of the Company.
(c) GOVERNING LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of California.
(d) HEADINGS. The headings used in this Warrant are used for
convenience only and are not to be considered in construing or interpreting
this Warrant.
(e) SATURDAYS, SUNDAYS, HOLIDAYS. If the last or appointed day for
the taking of any action or the expiration of any right required or granted
herein shall be a Saturday or a Sunday or shall be a legal holiday in the
State of California, then such action may be taken or such right may be
exercised on the next succeeding day not a legal holiday.
17. NO IMPAIRMENT. The Company will not, by amendment of its
Certificate of Incorporation or any other voluntary action,, avoid or seek to
avoid the observance or performance of any of the terms of this Warrant, but
will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such action as may be necessary or appropriate in
order to protect the rights of the Holder hereof against impairment.
18. ADDRESSES. Any notice required or permitted hereunder shall be in
writing and shall be mailed by overnight courier, registered or certified
mail, return receipt required, and postage prepaid, or otherwise delivered by
hand or by messenger, addressed as set forth below, or at such other address
as the Company or the Holder hereof shall have furnished to the other party.
If to the Company: Deltagen, Inc.
0000 Xxxx Xxxxxx
Xxx Xxxxxx, XX 00000
Attn: President
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If to the Holder: Lease Management Services, Inc.
0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx, EVP/GM
IN WITNESS WHEREOF, Deltagen, Inc. has caused this Warrant to be
executed by its officers thereunto duly authorized.
Dated as of January 8, 1999.
By: /s/ Xxxxxxx Xxxxxxxx
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Name: Xxxxxxx Xxxxxxxx
--------------------------------
Title: President
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NOTICE OF EXERCISE
1. The undersigned Warrantholder ("Holder") elects to acquire shares
of the Series __ Preferred Stock (the "Preferred Stock") of (the "Company"),
pursuant to the terms of the Stock Purchase Warrant dated _______________,
1998, (the "Warrant).
2. The Holder exercises its rights under the Warrant as set forth
below:
( ) The Holder elects to purchase ________ shares of
Preferred Stock as provided in Section 3(a) and
tenders herewith a check in the amount of
$_________ as payment of the purchase price.
( ) The Holder elects to convert the purchase rights
into shares of Preferred Stock as provided in
Section 3(b) of the Warrant.
3. The Holder surrenders the Warrant with this Notice of Exercise.
4. The Holder represents that it is acquiring the aforesaid shares
of Preferred Stock for investment and not with a view to or for resale in
connection with distribution and that the Holder has no present intention of
distributing or reselling the shares.
5. Please issue a certificate representing the shares of the
Preferred Stock in the name of the Holder or in such other name as is
specified below:
Names:
Address:
Taxpayer I.D.:
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(Holder)
By:
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Title:
--------------------------------
Date:
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